This speech was published under
the 2010 to 2015 Conservative and Liberal Democrat coalition government

David Willetts speech on the strategy for UK Life Sciences: one year on.

Check against delivery

This really is an exciting time to be discussing the prospects for life sciences in the UK. We have a positive story to tell – right up to the announcements of the past week, with more than £100 million of dedicated funding for life sciences capital in the Autumn Statement and the pioneering genomics programme confirmed by the Prime Minister in Cambridge on Monday, which comes with up to £100 million more.

Almost two years ago, however, and the situation was rather different. Indeed, while today’s event is all about reflecting on the progress we’ve made in the past 12 months since the launch of the government’s Strategy for UK Life Sciences, I’m like to start further back – with Pfizer’s decision to close its R&D operations at Sandwich. Learning of that decision in early 2011 – not so long after AstraZeneca had elected to shut its facility at Charnwood – provided the starkest of warnings. It brought home the major changes underway globally in the life sciences industry: the shift away from in-house R&D to external collaborations and partnerships; the increasing mobility of capital as other countries raise their game and, therefore, the need for an integrated approach to attract investment and maintain competitive advantage.

The work of the Sandwich taskforce certainly taught us a great deal about the direction in which the industry is heading. And then, in June last year, the Prime Minister hosted a valuable and interesting seminar focused on life sciences which clearly demonstrated that we need to do better to make the necessary connections between our outstanding research base, our increasingly diverse life sciences sector – one featuring a growing number of SMEs – and our clinical strengths across the National Health Service.

It was these fundamental insights that informed the preparation of the life sciences strategy published this time last year. In it, we determined to achieve three main things. The first was to dramatically improve collaboration between academia, industry and the NHS. The second was to boost the skills and pipeline of researchers, clinicians and technicians – without whom collaboration could not be properly realised. And the third was to foster the right business environment in the UK to encourage investment, so that we could translate discovery into real benefits for patients, support innovation through the translational funding gap, and remove bureaucratic barriers to the early adoption and diffusion of medical breakthroughs in the NHS. This week we published the Strategy for UK Life Sciences: One Year On report, showing lots of progress is underway.

For the first of these ambitions – boosting collaboration in a stronger life sciences ecosystem – the Medical Research Council has promised £130 million for work on stratified and experimental medicine, with the first round of grant recipients in stratified medicine, announced on Monday, tackling rheumatoid arthritis, hepatitis C and Gaucher’s disease. These three awards will establish research consortia in each of these disease areas and taken in total will combine 34 academic groups and 20 industry partners with charities and patients across the UK. We are investing £1 billion per annum through the National Institute for Health Research, which includes £500 million in our translational research infrastructure in the NHS.

And the new Biomedical Catalyst, established to bridge the gap between innovative research and actual commercialisation, is already funding some great projects: to develop a new vaccine for the hospital-acquired infection C. difficile, which currently kills around 3,000 people a year in the UK; to advance a treatment for late-stage Parkinson’s that significantly reduces patients’ time in surgery; to utilise a mobile phone app that helps people with conditions like schizophrenia and bipolar disorder to manage them more effectively on their own.

We have also made good progress on our second objective to support skills and talent. We’ve seen the launch of the dedicated Technical Apprenticeship Service, confirmation of the first eight Research Professorships under the aegis of the National Institute for Health Research and the successful piloting of the Society of Biology’s degree accreditation programme.

We are committed to our third objective of having a competitive business environment. From April 2013, the Patent Box will come into force – offering a 10 per cent corporation tax rate on profits attributable to patents. To optimise the commercial environment, we are also improving the visibility and certainty of R&D tax relief. We hope that the introduction of an above the line R&D tax credit will attract large scale investment in innovation.

This is all exciting, tangible stuff – promising for patients, promising for business and job creation. What’s vital now is that the work of integration continues, refining a system that makes full and optimum use of every one of its constituent elements. Ours is a 10 year strategy – and it hinges on achieving success in all areas.

Take public investment. The ring-fenced science settlement, agreed early on by the Coalition, was a serious commitment in these straitened times – and we have built on it since. The latest money in the Autumn Statement will build the necessary research capability for the UK to compete globally in a potential $100 billion synthetic biology market. It will fund the development of a large manufacturing facility for biologic medicines such as antibodies and vaccines – improving our marketability as the location of choice for internationally mobile life sciences companies. And it will help fund imaging and cell manufacture technologies and a clean room for the UK Regenerative Medicine Platform.

In addition, we pumped £42 million into the life sciences sector in 2012 through the Regional Growth Fund, matched by private investment of almost £185 million. We have committed £300 million for the UK Research Partnership Investment Fund. To secure investment, universities are required to match by at least double the amount they receive from the fund from non-public sources. There are several projects relevant to life sciences around the UK that have secured funding of almost £147 million. However, we understand in the UK that financial resource alone is not enough to make us the go-to destination.

On increasing the take up of medical innovation on the ground, the Office for Clinical Research Infrastructure at the NIHR - or NOCRI as it is known - is starting to connect industry to the best investigators, research facilities and technologies. We know that we also need to continue improvement in study performance and there is a new 70-day benchmark for providers of NHS services to proceed from receiving a valid research application to recruiting the first patient. It has been a condition of new NIHR contracts since December 2011, and performance against this will affect further funding as of April 2013.

For this and several other measures in the strategy, we know that we will only be able to truly assess impact once they have been fully implemented. For example, earlier this week Sir David Nicholson said we know good progress is being made at a time of great change in the NHS but more always remains to be done. There are deep-seated barriers to innovation that must be changed right at the heart of the NHS. David Nicholson and the new Commissioning Board will continue to push ahead to achieve a true culture of innovation throughout the NHS which is important to patients and business.

The message we’re seeking to transmit globally is that life sciences companies can do everything they need to in this country. They can, like Astellas Pharma, establish their headquarters here. They can, like Eli Lilly, conduct early-stage research here – exploiting UK-based expertise in an unusually broad range of disciplines, from clinical pharmacology to statistics and data sciences. Or, like GSK and Eisai, they can establish cutting-edge manufacturing plants on these shores. In the past year, the UK has received more than £1 billion of industry and private sector investment – from Johnson & Johnson, Novartis and others.

To demonstrate our capacity for pioneering research, we will of course be taking forward the large-scale genomics project – the first attempt to exploit this technology within a mainstream health system. As the Prime Minister explained on Monday, we’ll be sequencing the entire genome of up to 100,000 patients. As patterns emerge, doctors will gain more advanced understanding of cancers and inherited diseases, enabling more targeted care. A critical feature of the project, which relates to one of my earlier comments, is how it will provide the training ground for a new generation of British geneticists and will educate the wider community in harnessing genomics technology.

Clearly, it is essential that international companies appreciate what’s available in the UK – the knowhow, the facilities, the opportunities to conduct clinical trials. That’s where UK Trade and Investment come in. Earlier this year, UKTI established the Life Science Investment Organisation to help connect international investors and companies with all parts of our life sciences sector. Later on at today’s event, the UKTI will launch a new global campaign highlighting the many opportunities to invest in and partner with our knowledge base, our SMEs, our manufacturers and our commercial supply chain.

At the end of 2012, I’m proud to report that there are over 380 pharmaceutical companies based in the UK, employing nearly 70,000 people, with an annual turnover of £30 billion. The medical technology and medical biotechnology sectors represent over 4,000 companies employing nearly 100,000 people with an annual turnover of around £20 billion.

The task ahead is to build on this solid base by encouraging more spinouts, attracting more companies from overseas and further investment. We’ll be sticking with the strategy formulated a year ago with such wise counsel from experts such as Sir John Bell, Chris Brinsmead and George Freeman – and we’ll be continually exploring ways to make the UK the best place in the world to pursue life sciences.